Yes you will always compromise your seller protection if you do not use the address provided via PayPal. In such cases you must ask the buyer to cancel the sale and buy again making the address change during the checkout process.
It seems to me like this buyer knew what they were doing a deliberately led you into using another address. Just so they could scam you.
Since it now Looks like illegal activity (fraud) I would be reporting this case to The ACORN. This is the Australian Federal Police. You will receive a case reference number. Once you have that pass it to both PayPal and EBay.
If this course of action fails I might be inclined to open a case with the Financial Ombudsman Service (FOS ) as well. One way or the other you should be able to get your money back as it seems you were deliberately scammed.